Taxpayer to spend billions more on Sizewell C nuclear plant

Times

5 hours ago

Ministers have agreed to take a £17.8 billion stake in the Sizewell C ­nuclear power plant in a move that they claim will reduce carbon emissions and even make money for the taxpayer.
Under plans announced by Rachel Reeves, the chancellor, the government will increase its investment in the project by ­£14.2 billion over the next three years on top of £3.6 billion of public money committed under the Conservatives. Further funding will come from the French energy group EDF, which is building the plant, as well as private infrastructure investors.
Whitehall sources said ministers decided to take a larger stake because they were confident it would provide a significant return to the taxpayer. Under the funding model, investors carry all the risk of cost overruns but are paid back through consumer bills and can make more money if the project comes in on time and on budget.
A plant with the same design being built by EDF at Hinkley Point has run billions of pounds over budget and is not expected to open before the early 2030s, more than five years late.
The company said it had learnt ­lessons from Hinkley, in Somerset, and can build Sizewell C, in Suffolk, faster and more cheaply. However, it is still likely to cost much more than the estimated £20 billion in 2020 and will not produce power for at least another decade. The total cost will be set out this summer when external private investors are announced.
Ultimately, the project will be paid for via consumers' electricity bills, adding about £1 a month to the cost of power over the 60-year lifespan of the plant.
The announcement is among investments in nuclear at the spending review as part of the government's pledge to decarbonise electricity supplies and cope with growing demand.
The Stop Sizewell C campaign group claimed that the government had not been honest about the full cost of the project
ALAMY
Ministers will also set out proposals to kick-start a generation of small modular reactors that supporters claim can be built faster and more cheaply than traditional plants. The government is expected to back a design developed by Rolls-Royce. Sources said the total government investment would be in the low billions of pounds. There will also be £2.5 billion for research and development into fusion energy to unlock the technology on a commercial scale.
The new money will be seen as a win for Ed Miliband, the energy secretary, who fought with the Treasury for significant capital investment in the government's clean energy goal.
The development comes despite concerns in government about the ­financial and political cost of net zeroas both the Tories and Reform are pledging to rethink the UK's climate pledges.
Miliband said that it showed the government would 'not accept the status quo of failing to invest in the future and energy insecurity for our country', adding: 'We need new nuclear to deliver a golden age of clean energy abundance. That is the only way to protect family finances, take back control of our energy and tackle the climate crisis.'
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Trade unions welcomed the move, which the Treasury said would go towards creating 10,000 jobs, including 1,500 apprenticeships. The GMB union said it was 'momentous'. Warren Kenny, the regional secretary, said: 'Sizewell C will provide thousands of good, skilled, unionised jobs and we look forward to … help secure a greener future.'
Alison Downes, of Stop Sizewell C, the campaign group, said ministers had not 'come clean' about the full cost of the project, which the group previously estimated could be as much as ­£40 billion. 'Where is the benefit for voters in ploughing more money into Sizewell C that could be spent on other priorities, and when the project will add to consumer bills and is guaranteed to be late and overspent, like Hinkley C?
'Ministers have still not come clean about Sizewell C's cost … Starmer and Reeves have signed up to HS2 mark 2.'